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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
January 28, 2000
FAMILY GOLF CENTERS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-25098 11-3223246
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
538 Broadhollow Road
Melville, New York 11747
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(Address of principal executive offices)
Registrant's Telephone Number, including
area code: (516) 694-1666
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(Former Address, if changed since last report)
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Item 5. Other Events.
As part of the Company's restructuring plan, the Company has sold eight
of its underperforming golf facilities as well as its golf school located in
Hilton Head, South Carolina for approximately $12.1 million in cash in aggregate
gross sales proceeds. The golf facilities sold include sites in Arlington,
Texas, Austin, Texas, Dallas, Texas, Fort Worth, Texas, Tucson, Arizona, Mesa,
Arizona and Olympia, Washington as well as a golf course in Leesburg, Virginia.
As required under the Company's $130 million credit facility, a portion of the
aggregate gross sales proceeds was used to repay a portion of such debt. The
Company continues to market its remaining underperforming assets and non-core
assets in accordance with its restructuring plan.
On or about January 28, 2000, the Company entered into Amendment No. 2
and Waiver dated as of December 31, 1999 (the "Waiver") to the Amended and
Restated Credit, Security, Guaranty and Pledge Agreement, dated as of December
2, 1998, as amended and restated as of October 15, 1999 (the "Credit
Agreement"), by and among the Company, certain subsidiaries of the Company, the
lenders named therein, and The Chase Manhattan Bank, as a lender and as agent
for the lenders. The Waiver, among other things, waives the Company's compliance
with certain financial tests for the period commencing December 31, 1999 through
March 31, 2000.
The foregoing summary of the Waiver is qualified in its entirety by
reference to a copy of the Waiver filed as an Exhibit hereto and incorporated
herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired: Not applicable.
(b) Pro Forma Financial Information: Not applicable
(c) Exhibits
No. Exhibit
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10.1 Amendment No. 2 and Waiver dated as of December 31,
1999 to the Amended and Restated Credit, Security,
Guaranty and Pledge Agreement, dated as of December
2, 1998 as amended and restated as of October 15,
1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
February 4, 2000
FAMILY GOLF CENTERS, INC.
By: /s/ Pamela S. Charles
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Pamela S. Charles,
Vice President and Secretary
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INDEX TO EXHIBITS
Exhibit Description
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10.1 Amendment No. 2 and Waiver dated as of December 31, 1999 to
the Amended and Restated Credit, Security, Guaranty and Pledge
Agreement, dated as of December 2, 1998 as amended and
restated as of October 15, 1999.
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Exhibit 10.1 - Amendment No. 2 and Waiver
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AMENDMENT NO. 2 AND WAIVER
dated as of December 31, 1999 (this
"Amendment") to the Amended and
Restated Credit, Security, Guaranty
and Pledge Agreement dated as of
December 2, 1998 as amended and
restated as of October 15, 1999 (as
the same may be further amended,
supplemented and otherwise modified
from time to time, the "Credit
Agreement") by and among FAMILY GOLF
CENTERS, INC., a Delaware
corporation (the "Company"), the
GUARANTORS name therein, the LENDERS
named therein and THE CHASE
MANHATTAN BANK, a New York banking
corporation, as Agent for the
lenders (in such capacity, the
"Agent").
WHEREAS, subject to the terms and conditions hereof, the Credit Parties, the
Lenders and the Agent desire to amend certain Sections of the Credit Agreement,
and the Lenders and the Agent desire to waive compliance by the Credit Parties
with a certain Section of the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
1. AMENDMENTS. Subject to the satisfaction of the conditions precedent set forth
in Section 4 hereof, the Credit Agreement is hereby amended as of the Effective
Date as follows:
(a) Section 3.03(b) of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following in lieu thereof:
"(b) The Company shall prepay to the Lenders from the Net Cash
Proceeds of Permitted Asset Sales (other than the initial Net Cash
Proceeds of up to $5,500,000 in connection with Permitted Asset Sales)
and from the Net Cash Proceeds of any debt or equity issuances, such
amounts as set forth as follows: (i) from the first $10,000,000 of such
Net Cash Proceeds or any portion thereof, the Company may retain
seventy-five percent (75%) of such Net Cash Proceeds and shall use such
amount to prepay Tranche A Loans until the Tranche A Loans are paid in
full, and the Company shall pay twenty-five percent (25%) of such Net
Cash Proceeds to the Lenders to permanently prepay Tranche B Loans then
outstanding; (ii) from the next $15,000,000 of such Net Cash Proceeds
or any portion thereof, the Company may retain sixty percent (60%) of
such Net Cash Proceeds and shall use such amount to prepay Tranche A
Loans until the Tranche A Loans are paid in full, and the Company shall
pay forty percent (40%) of such Net Cash Proceeds to the Lenders to
permanently prepay Tranche B Loans then outstanding; and (iii) from the
next $10,000,000 of such Net Cash Proceeds or any portion thereof, the
Company may retain fifty-five percent (55%) of such Net Cash Proceeds
and shall use such amount to prepay Tranche A Loans until the Tranche A
Loans are paid in full, and the Company shall pay forty-five percent
(45%) of such Net Cash Proceeds to the Lenders to permanently prepay
Tranche B Loans then outstanding. Thereafter, all such Net Cash
Proceeds shall be paid to the Lenders to permanently prepay Loans then
outstanding. Any prepayment of the Tranche B Loans hereunder shall be
applied in the direct order of maturity and shall reduce the principal
amounts required to be paid pursuant to paragraph (d) below."
(b) Section 6.03(l) of the Credit Agreement is hereby amended by
deleting therefrom the word "and" at the end thereof.
(c) Section 6.03(m) of the Credit Agreement is hereby amended by
deleting the period (".") from the
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end thereof and inserting the word "; and" in lieu thereof.
(d) Section 6.03 of the Credit Agreement is hereby amended by adding to
the end thereof the following new clause (n):
"(n) on a weekly basis, a copy of the Company's consolidated
cash forecast."
(e) Section 6.20 of the Credit Agreement is hereby amended by deleting
it in its entirety and replacing it with the following in lieu thereof:
"SECTION 6.20 Mortgage; Title Insurance; etc. (a) Use all
commercially reasonable efforts to deliver to the Agent as soon as
possible but in any event no later than June 30, 2000, the Mortgages,
title insurance, appraisals, environmental assessments and other
insurance requested by the Agent with regard to the remainder of the
properties owned or leased by a Credit Party other than properties for
which the Company is unable to obtain the requisite consents; and (b)
use all commercially reasonable efforts to deliver to the Agent as soon
as possible but in any event no later than June 30, 2000, such ALTA
surveys requested by the Agent."
(f) Section 6.23 of the Credit Agreement is hereby amended by deleting
therefrom the words "sixty (60) days" and inserting the words "one hundred five
(105) days" in lieu thereof.
(g) Article VI of the Credit Agreement is hereby amended by adding to
the end thereof the following new Section 6.24:
"SECTION 6.24. Tax Refunds. Promptly upon receipt of all or
any portion of any tax refund, deposit such funds into the
Concentration Account."
(h) Article VI of the Credit Agreement is hereby amended by adding to
the end thereof the following new Section 6.25:
"SECTION 6.25. Asset Sales Manager. Retain an asset sales
manager no later than February 9, 2000, on terms satisfactory in all
respects to the Agent in its sole discretion."
(i) Article VI of the Credit Agreement is hereby amended by adding to
the end thereof the following new Section 6.26:
(j) Schedule 6.16 of the Credit Agreement is hereby amended by deleting
the date "January 31, 2000" and inserting the date "March 31, 2000" in lieu
thereof.
(k) Section 7.13(b) of the Credit Agreement is hereby amended by
deleting the words "at any time" and adding after the word "period" the words
"at the end of the quarter set forth below".
"SECTION 6.26. Status of Asset Sales. Promptly notify the
Agent of all meaningful expressions of interest received orally or in
writing by the Company's chief executive officer or the chief operating
officer with respect to prospective asset sales by any Credit Party
and, promptly upon request by the Agent, provide the Agent with
detailed current information regarding the status of the Company's
asset sale process."
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2. WAIVER. Compliance with Sections 7.13(a) and (c) is hereby waived for the
period commencing December 31, 1999 to and including 5:00 p.m. on March 31, 2000
(the "Waiver Period"); provided that (i) any breach during the Waiver Period in
the timely performance, observance or fulfillment of any of the terms or
conditions contained in this Amendment shall constitute an Event of Default
under the Credit Agreement and, unless the Agent and the requisite number of
Lenders otherwise agree in writing, shall result in an immediate termination of
the effectiveness of the waiver contained herein; and (ii) an Event of Default
shall be deemed to have occurred on the earlier of (i) February 10, 2000 if an
asset sales manager has not been retained on terms satisfactory in all respects
to the Agent and (ii) as of the close of business on the Waiver Termination Date
(as defined below) if the Company is not in compliance with Sections 7.13(a) and
(c) of the Credit Agreement as of such date at the levels set forth in the
Credit Agreement as of the date hereof. As used herein, the term "Waiver
Termination Date" shall mean 5:00 p.m. on March 31, 2000, or such later date as
may be agreed upon in writing by the Agent and the Required Lenders. Upon the
occurrence of any Event of Default, the Agent and the Lenders shall have all
rights and remedies available to them under the Loan Documents, at law or
otherwise with respect to each Event of Default, which rights and remedies are
hereby expressly reserved.
3. REPRESENTATIONS AND WARRANTIES. The Credit Parties represent and warrant
that, after giving effect to this Amendment:
a. the representations and warranties contained in the Credit Agreement
are true and correct in all material respects on and as of the date hereof as if
such representations and warranties had been made on and as of the date hereof
(except to the extent that any such representations and warranties specifically
relate to an earlier date); and
b. no Default or Event of Default will have occurred and be continuing
on and as of the date hereof.
4. CONDITIONS PRECEDENT. The effectiveness of this Amendment is subject to the
satisfaction in full of each of the conditions precedent set forth in this
Section 4 (the date on which all such conditions have been satisfied being
herein called the "Effective Date"):
(a) the Agent shall have received counterparts of this Amendment which,
when taken together, bear the signatures of the Company, each Guarantor, the
Agent and each of the requisite number of Lenders;
(b) all legal matters incident to this Amendment shall be satisfactory
to Morgan, Lewis & Bockius LLP, counsel to the Agent; and
(c) all fees and disbursements of Morgan, Lewis & Bockius LLP, counsel
to the Agent, which are owing from the Company and the Guarantors under the
Credit Agreement or otherwise shall have been paid in full.
5. MISCELLANEOUS.
(a) Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Credit Agreement.
(b) Except as expressly amended hereby, the Credit Agreement shall
remain in full force and effect in accordance with the original terms thereof.
(c) The amendments and waiver herein contained are limited specifically
to the matters set forth above and do not constitute directly or by implication
an amendment or waiver of any other provision of Credit Agreement
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or any default which may occur or may have occurred under the Credit Agreement.
(d) Should there be a need for further amendments or waivers with
respect to the matters addressed herein or any other matters, requests for such
amendments or waivers shall be evaluated by the Lenders when formally requested,
in writing, by the Company, and the Lenders may deny any such requests for any
reason in their sole discretion.
(e) This Amendment may be executed in one or more counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute but one Amendment. Facsimile signatures at the foot hereof shall be
given the same effect as originals.
(f) This Amendment shall constitute a Loan Document.
(g) This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to the principles of
conflicts of law.
(h) The Company agrees to pay all out-of-pocket expenses incurred by
the Agent in connection with the preparation, execution and delivery of this
Amendment, including, but not limited to, the reasonable fees and disbursements
of counsel for the Agent.
(i) The Credit Parties acknowledge that they have no existing defense,
counterclaim, offset, cross-complaint, claim or demand of any kind or nature
whatsoever that can be asserted to reduce or eliminate all or any part of their
respective liability to pay the Obligations under or in respect of the Credit
Agreement and all other Loan Documents. The Credit Parties hereby release and
forever discharge the Agent, the Lenders and all of their officers, directors,
employees, agents, advisors and attorneys from any and all actions, causes of
action, debts, dues, claims, demands, liabilities and obligations of every kind
and nature, both in law and in equity, known or unknown, whether matured or
unmatured, absolute or contingent.
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IN WITNESS WHEREOF, the Company, the Guarantors, the Agent and the Lenders, have
caused this Amendment to be duly executed by their duly authorized officers, all
as of the day and year first above written.
FAMILY GOLF CENTERS, INC.
By: /s/ Dominic Chang
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Name: Dominic Chang
Title: Chief Executive Officer
TPT EL SEGUNDO, INC.
GLOBAL GOLF/GAVILAN
INDIAN RIVER FAMILY GOLF CENTERS, INC.
TUCSON FAMILY GOLF CENTERS, INC.
CINCINNATI FAMILY GOLF CENTERS, INC.
ST. LOUIS FAMILY GOLF CENTERS, INC.
WEST PALM BEACH FAMILY GOLF CENTERS,
INC.
SAN JOSE FAMILY GOLF CENTERS, INC.
EASTON FAMILY GOLF CENTERS, INC.
RANDALL'S ISLAND FAMILY GOLF CENTERS,
INC.
PRIVATIZATION PLUS, INC.
WESTMINSTER FAMILY GOLF CENTERS, INC.
CAROLINA SPRINGS FAMILY GOLF CENTERS,
INC.
ORIENT ASSOCIATES INTERNATIONAL, INC.
SKYDRIVE ALLEY POND COMPANY, INC.
SKYDRIVE GREENBURGH CO., INC.
SKYCON CONSTRUCTION CO., INC.
SKYDRIVE WILLOWBROOK, NJ, INC.
SKYDRIVE CO., INC.
PELHAM FAMILY GOLF CENTERS, INC.
RICHMOND FAMILY GOLF CENTERS, INC.
PEACHTREE FAMILY GOLF CENTERS, INC.
ALPHARETTA FAMILY GOLF CENTERS, INC.
VALLEY VIEW FAMILY GOLF CENTERS, INC.
MESA FAMILY GOLF CENTERS, INC.
VIRGINIA BEACH FAMILY GOLF CENTERS,
INC.
DENVER FAMILY GOLF CENTERS, INC.
FLANDERS FAMILY GOLF CENTERS, INC.
MARGATE FAMILY GOLF CENTERS, INC.
BROOKLYN FAMILY GOLF CENTERS, INC.
LAKE GROVE FAMILY GOLF CENTERS, INC.
GOLDEN SPIKES, INC.
WHITEHALL FAMILY GOLF CENTERS, INC.
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SPORTS PLUS PROPERTIES, INC.
SPORTS PLUS PROPERTIES, LLC
GENPROP, LLC
ICEWORKS OF AMERICA, INC.
COMMACK FAMILY GOLF CENTERS, INC.
GREENVILLE FAMILY GOLF CENTERS, INC.
CHICAGO FAMILY GOLF CENTERS, INC.
FLEMINGTON FAMILY GOLF CENTERS, INC.
YORKTOWN FAMILY GOLF CENTERS, INC.
THE PRACTICE TEE, INC.
THE SEVEN IRON, INC.
C.B. FAMILY GOLF CENTERS, INC.
DARLINGTON FAMILY GOLF CENTERS, INC.
MAINEVILLE FAMILY GOLF CENTERS, INC.
MILWAUKEE FAMILY GOLF CENTERS, INC.
OLNEY FAMILY GOLF CENTERS, INC.
PALM DESERT FAMILY GOLF CENTERS, INC.
BROWARD FAMILY GOLF CENTERS, INC.
ENGLEWOOD FAMILY GOLF CENTERS, INC.
RALEIGH FAMILY GOLF CENTERS, INC.
TEMPE FAMILY GOLF CENTERS, INC.
FEDERAL WAY FAMILY GOLF CENTERS, INC.
COUNTY LINE FAMILY GOLF CENTERS, INC.
FAIRFIELD FAMILY GOLF CENTERS, INC.
CONFIDENCE GOLF, INC.
KANSAS FAMILY GOLF CENTERS, INC.
ELK GROVE FAMILY GOLF CENTERS, INC.
SPORTS PLUS CINCINNATI, INC.
WICHITA FAMILY GOLF CENTERS, INC.
BLUE EAGLE OF FLORIDA, INC.
SPORTS PLUS RALEIGH, INC.
SPORTS PLUS WOODBRIDGE, INC.
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METROGOLF INCORPORATED
METROGOLF VIRGINIA, INC.
METROGOLF NEW YORK, INC.
FAMILY GOLF ACQUISITION, INC.
BRONX FAMILY GOLF CENTERS, INC.
MILPITAS FAMILY GOLF CENTERS, INC.
SAN BRUNO FAMILY GOLF CENTERS, INC.
INTERBAY FAMILY GOLF CENTERS, INC.
CARVER FAMILY GOLF CENTERS, INC.
PALM FAMILY GOLF CENTERS, INC.
CERRITOS FAMILY GOLF CENTERS, INC.
PHILADELPHIA FAMILY GOLF CENTERS, INC.,
AS SUCCESSOR BY MERGER TO PINLEY ENTERPRISES
LTD.
ENCINO/BALBOA FAMILY GOLF CENTERS, INC.
HOLBROOK FAMILY GOLF CENTERS, INC.
SHELTON FAMILY GOLF CENTERS, INC.
SPORTS PLUS NEW ROCHELLE, INC.
METROGOLF SAN DIEGO INC.
METROGOLF ILLINOIS CENTER, INC.
METROGOLF MANAGEMENT, INC.
FAMILY GOLF VENDING, INC.
OVERLAND FAMILY GOLF CENTERS, INC.
PARDOC VENDING CORP.
EAGLE QUEST GOLF CENTERS (TEXAS II) INC.
EAGLE QUEST GOLF CENTERS (CALIFORNIA)
INC.
EAGLE QUEST GOLF CENTERS (H.P.) INC.
EAGLE QUEST GOLF CENTERS (WASHINGTON)
INC.
GOLF PARK, INC.
GOOSE CREEK GOLF PARTNERS
LIMITED PARTNERSHIP
VINTAGE NEW YORK GOLF, LLC
SACRAMENTO FAMILY GOLF CENTERS, INC.
PORTLAND FAMILY GOLF CENTERS, INC.
CARLSBAD FAMILY GOLF CENTERS, INC.
EVERGREEN FAMILY GOLF CENTERS, INC.
OVERLAND PARK, LLC
EAGLE QUEST GOLF CENTERS (TEXAS) INC.
PRECISION COURSES, INC.
IMG PROPERTIES, INC.
EAGLE QUEST GOLF CENTERS ENTERTAINMENT,
INC.
EAGLE QUEST GOLF CENTERS (U.S.) INC.
SOLANO GOLF CENTER, LP
ILLINOIS CENTER GOLF PARTNERS, L.P.
GBGC FAMILY GOLF CENTERS, INC.
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VOORHEES FAMILY GOLF CENTERS, INC.
EL CAJON FAMILY GOLF CENTERS, INC.
BLUE EAGLE OF KANSAS, INC.
BLUE EAGLE (OP) INC.
SKATENATION, INC.
RECREATIONAL MANAGEMENT CORPORATION
SKATENATION OF RICHMOND WEST, LLC
SKATENATION OF PRINCE WILLIAM, LLC
SKATENATION OF PINEY ORCHARD, LLC
82ND AVENUE GOLF RANGE, INC.
EVERGREEN GOLF COURSE, LLC
EAGLE QUEST GOLF CENTERS (WASHINGTON
II), INC.
KANSAS CITY FAMILY GOLF CENTERS, INC.
BLUE EAGLE OF FLORIDA, INC.
PINNACLE ENTERTAINMENT, INC.
RECREATIONAL MANAGEMENT
SERVICES CORPORATION
RECREATIONAL MANAGEMENT SERVICES
CORPORATION OF NEW JERSEY, INC.
SKATENATION OF RICHMOND SOUTH, LLC
SKATENATION OF RESTON, LLC
INTERNATIONAL SKATING CENTER OF
CONNECTICUT, LLC
RMSC OF CALIFORNIA, INC.
LODI FAMILY GOLF CENTERS, INC.
By: /s/ Krishnan P. Thampi
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Name: Krishnan P. Thampi
Title: President and COO
THE CHASE MANHATTAN BANK,
as Agent and as a Lender
By: /s/ Billie Prue
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Name: Billie Prue
Title:
CIBC, INC., as a Lender
By: /s/ Dominic Sorresso
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Name: Dominic Sorresso
Title: Executive Director
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BANK OF AMERICA, N.A., as a Lender
By: /s/ DeWitt W. King
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Name: DeWitt W. King
Title: Managing Director
THE DIME SAVINGS BANK OF NEW YORK FSB, as a
Lender
By:/s/ Gray R. Olson
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Name: Gray R. Olson
Title: Vice President
THE MERCHANTS BANK OF NEW YORK,
as a Lender
By: /s/ Andrew S. Baron
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Name: Andrew S. Baron
Title: Vice President
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